WakeMed Blogs

Today, at the General Assembly a Senate Finance Committee passed a motion to send a new version of tax reform bill HB998 to the Senate for a vote. If this bill passes as it is currently written, it will require WakeMed and many other not-for-profit hospitals like us to pay sales tax after a four-year phase in period.

In WakeMed's case, this means a $10 million impact on our bottom line. Unfortunately, a financial hit of this magnitude would negatively impact on the services WakeMed and other hospitals like us are able to provide for patients.

Additionally, this tax bill is meant to reform the tax code to grow jobs in North Carolina. Hospitals are not only care providers, but they are also frequently the largest employers in their communities. This version of the tax bill which eliminates the non-profit sales-tax refund would be detrimental to all North Carolina non-profit hospitals and would ultimately mean the loss of jobs and hospital services in many areas.

Not-for-profit safety net hospitals do benefit from not paying sales tax, but they reinvest much more than that in charity care delivered to members of our communities who cannot pay for health services and other community benefit activities. In fact, WakeMed's community benefit for FY 2012 was $189,796,508 plus an additional $13.4 million in bad debt. Bottom line is we more than earn a sales tax exemption as a not-for profit in North Carolina.

Raleigh, N.C. -Governor Pat McCrory, Senate President Pro Tempore Phil Berger and House Speaker Thom Tillis joined forces today in pursuit of Medicaid reform. A waiver is the next crucial step in pursuing innovative reform for North Carolina's Medicaid system. The federal government grants waivers that allow flexibility in how states operate and finance their Medicaid programs.

"The federal government must allow North Carolina to come up with its own solutions," said Governor McCrory. "We have a unique opportunity in North Carolina to ensure patients and taxpayers achieve the common goal of providing the best possible patient care in a system that is financially sustainable."

The Senate's budget will call for the Department of Health and Human Services to prepare a detailed waiver application for review by the General Assembly outlining the Medicaid reform plan. This plan will be in line with the Governor's vision to provide care for the whole person by uniting physical and behavioral health, increase administrative ease and efficiency for providers, create a predictable and sustainable Medicaid program for taxpayers.

"Medicaid's out-of-control costs are undermining our ability to fund core constitutional obligations like education, transportation and our judicial system," said Senate President Pro Tempore Phil Berger (R-Rockingham). "The budget we introduce next week must include over $1 billion in additional funding for out-of-control Medicaid costs. We applaud Governor McCrory for leading the effort to reform Medicaid and look forward to receiving his recommendations to effect meaningful change in the coming months."

House Speaker Thom Tillis (R-Mecklenburg) agreed and said the time for reform is now.

"We cannot continue to have frequent unplanned Medicaid shortfalls that wreak havoc on the budgeting process. Medicaid must stop being a budgetary time bomb," said Speaker Tillis.

The governor and Health and Human Services Secretary Aldona Wos began "The Partnership for a Healthy North Carolina" reform process by issuing a request for information in early February. The focus is on better care for patients, better customer service for providers and more predictable costs. Secretary Wos along with Medicaid Director Carol Steckel are traveling the state getting feedback from the public on the reform to fix North Carolina's broken Medicaid system.

"With the support of Governor McCrory, Senate President Pro Tempore Phil Berger and House Speaker Thom Tillis, we are moving forward to reform our Medicaid system and will continue to have dialogue with the health care community and the public in this process," said Secretary Aldona Wos

The cost of healthcare and hospital billing is not only a hot topic in our neighborhood. It is a conversation being had across the nation.

American Hospital Association President and CEO Richard Umbdenstock recently submitted an editorial to the USA Today discussing some of the reform initiatives happening in hospitals across the country. Umbdenstock is right to assert that hospitals have a great opportunity to make billing simpler and more transparent for consumers, and we are actively working toward this goal.

Hospital billing too complex: Another View USA Today Op Ed by Richard UmbdenstockMany parts of America's health care delivery and financing systems urgently need updating, and the matter of "charges" ranks high on the list. Today's hospital bill is a symptom of a broken payment system.

Hospitals are being criticized across the United States for having huge profits. The News & Observer's Prognosis Profits series is an example. On Friday, the News & Observer's editorial page included a write up entitled Hospitals in Wonderland. This editorial stated that ..

"A lower limb joint replacement done at Raleigh's Rex Hospital costs just over $54,000. At UNC Hospitals, which owns Rex, the procedure costs $41,415. Medicare pays UNC Hospitals $20,610 for the procedure, but pays Rex an average of $12,515. At Presbyterian Orthopaedic in Charlotte, the procedure costs $69,034. At Duke University, it's $43,551. It's hard to understand how anyone could read the previous stories and this one and conclude that health care reform isn't needed. If anything, more radical common-sense change is imperative. The crazy quilt is enriching some in the medical field, especially hospitals and their administrators and drug companies and their executives, but it's scaring ordinary people who worry they'll lose their insurance, and later forfeit everything they have because of an illness."

Hospitals agree reform is needed, but it is inaccurate to place all of the blame exclusively on hospitals. In fact, it was just a few years ago that The News & Observer was writing articles examining the excessive profits of our state's largest not-for-profit health insurer.

WakeMed is paid only 31 percent of charges from all payers combined. Hospitals must also achieve a positive margin to continue to serve their patients and communities. A 4 percent operating margin, which is WakeMe's goal, is quite low when compared to almost any other business and is not excessive to maintain a healthy hospital system.

The healthcare financing system is "nonsensical" as described in the editorial, and we all - hospitals, insurance companies, providers and patients - need to work together to fix the issues.

Hospitals are being criticized across the United States for having huge profits. The News & Observer's Prognosis Profits series is an example. On Friday, the News & Observer's editorial page included a write up entitled Hospitals in Wonderland. This editorial stated that ..

"A lower limb joint replacement done at Raleigh's Rex Hospital costs just over $54,000. At UNC Hospitals, which owns Rex, the procedure costs $41,415. Medicare pays UNC Hospitals $20,610 for the procedure, but pays Rex an average of $12,515. At Presbyterian Orthopaedic in Charlotte, the procedure costs $69,034. At Duke University, it's $43,551. It's hard to understand how anyone could read the previous stories and this one and conclude that health care reform isn't needed. If anything, more radical common-sense change is imperative. The crazy quilt is enriching some in the medical field, especially hospitals and their administrators and drug companies and their executives, but it's scaring ordinary people who worry they'll lose their insurance, and later forfeit everything they have because of an illness."

Hospitals agree reform is needed, but it is inaccurate to place all of the blame exclusively on hospitals. In fact, it was just a few years ago that The News & Observer was writing articles examining the excessive profits of our state's largest not-for-profit health insurer.

WakeMed is paid only 31 percent of charges from all payers combined. Hospitals must also achieve a positive margin to continue to serve their patients and communities. A 4 percent operating margin, which is WakeMe's goal, is quite low when compared to almost any other business and is not excessive to maintain a healthy hospital system.

The healthcare financing system is "nonsensical" as described in the editorial, and we all - hospitals, insurance companies, providers and patients - need to work together to fix the issues.